Facilities Management: How Smart Systems Cut HVAC Usage Costs For Retailers

Interview with Sam Ramadori

Fifteen percent of the world’s carbon emissions come from heating and cooling buildings. Smart systems that control HVAC and lighting cut costs and help achieve sustainability goals.

Furniture World spoke with Sam Ramadori, the CEO of BrainBox AI, a business that focuses on AI-driven HVAC optimization solutions designed to reduce emissions and energy costs and create operational efficiencies.

Furniture retailers may address retail sustainability by recycling packaging materials and use the power of solar, wind, and geothermal energy to generate electricity. Others have purchased or plan to buy electric vehicles and favor suppliers committed to sourcing sustainable materials. “Recently,” said Ramadori, “additional possibilities have opened up to reduce consumption and carbon footprints using AI systems. The effect is substantial because 15 percent of the world’s carbon emissions come from heating and cooling buildings.

“A thermostat on the wall controls most furniture stores’ HVAC systems,” he explained. “All it knows is the current inside temperature. It can’t make decisions based on the weather forecast, the current temperature outside, how many people are in a showroom and/or energy costs.

“Intelligent systems are a bit like self-driving cars. They rapidly learn from their environment and decide how to get from point A to point B. There are no humans in the loop. Jean-Simon Venne, BrainBox AI’s co-founder and Chief Technology Officer, had this epiphany when he first tested one of the original beta versions of a self-driving car. He realized this technology could be adapted to office buildings and retail stores.

“Once autonomous AI concepts are brought into buildings, they become smart. They can predict what will happen in each area and make decisions to make buildings more efficient. The result is less equipment running time and greater efficiency. Plus, energy can be used at times of the day when power is more affordable or environmentally friendly.

“And, although self-driving car technology isn’t 100% there yet, autonomous AI concepts brought into buildings are smart enough to function perfectly in real-world situations.”

Why Now?

“Retailers have always pursued efficiency,” observed Ramadori, “but more recently, interest in sustainability from public-facing companies, including furniture retailers, has risen much more than for the owners of office buildings who are anonymous to the public and don’t need to make sustainability promises or set goals for sustainable practices.

“If a top-100 furniture retailer has set goals toward a net-zero carbon footprint measured in units of carbon dioxide equivalent, CO2e, there’s no way to escape having to look at physical store footprints. Saving money is important, but the number one reason retailers explore smart building technology is sustainability.

“For example, Sleep Country installed AI-enabled technology across its 214-store portfolio that includes 245,000 square feet of real estate. The goal is to reduce energy costs to help meet its public commitment to net zero by 2040.

“If you have a truck fleet, going electric to achieve decarbonization goals seems inevitable. Decisions are tied up with government mandates, incentives and other issues. What’s exciting about using cloud-delivered technology to control HVAC and lighting is that the immediate effects don’t come with significant upfront costs.

“Facilities management,” Ramadori continued, “can be broken down into interior building systems, notably lighting and HVAC. Exterior systems, including EV charging stations, have become more important recently due to increasing retailer interest.”

Ramadori said that most furniture retailers don’t have a facilities manager on site. “We’ve installed for companies that have 15 or 20 locations. At that level, typically, there’s a facility manager in the head office. But there’s nobody on site who has the time to micromanage lighting and HVAC systems.”

“Sleep Country installed AI-enabled technology in its 214-store portfolio that includes 245,000 square feet of real estate. The goal is to reduce energy costs to help meet its public commitment to net zero by 2040.”

Too Hot Or Cold

“Let’s say a furniture store outside of Boise, Idaho, has an HVAC system that’s working, but it’s either too hot or too cold in certain store areas. Putting aside questions of efficiency and cost for now, the immediate problem is that customers are uncomfortable. Really, the only thing that a retailer can do other than push a few buttons on a thermostat is to call the HVAC service company, which can get expensive very fast.

“And this is where an AI solution can solve a problem before it happens. Let’s say the HVAC system is scheduled to start cooling at 7:30 a.m. on an average summer day. However, if the forecast temperature is over 100 degrees and super humid, which happens in Boise seven days during an average summer, it can be a problem.

“An autonomous AI system is aware of a building’s thermal behavior and adjusts the HVAC, depending on the forecast, to start at 7:42 or, if it’s going to be a little warmer, 7:36. Typical annual energy savings and cost reductions are between 15% and 25%. For a 20,000-square foot store, that might be about $10,000.”

“Once autonomous AI systems are brought into buildings, they become smart. They can predict what will happen in each area and make decisions to make buildings more efficient.” -Sam Ramadori

Required Upgrades

“For a small store with two or three rooftop units, all that’s required would be replacing thermostats with ones that communicate with the cloud. Large stores with energy management systems might just need a software driver downloaded to their system. Those retailers that have people-counting systems, different zones and operating hours can be modulated in various ways and systems can be supplemented with Google’s ‘popular times’ metric, which estimates, based on historical data, when most people will be in a store. If it’s 20 degrees outside, it makes a difference if a front door opens three times or 30 times per hour. Areas can be pre-heated or pre-cooled to account for traffic and keep customers comfortable.”

Ramadori noted that annual service fees for AI systems depend on store size, current equipment, energy and set-up costs. Every retailer should consider local weather conditions and speak with suppliers who provide AI-enabled systems to estimate savings.

“Investigate government and electric utility incentives. There are five thousand municipalities in the US. For instance, New York will reimburse companies for putting in systems, as long as the service provider is registered.”

“Perhaps five years from now, most buildings are going to need to be able to react and have the flexibility to control their energy usage.”

Conclusion

“This world is changing very rapidly,” Ramadori concluded. “In the past, buildings consumed energy, and retailers didn’t need to concern themselves with what was happening on the energy grid. Consumer-facing companies didn’t need to report progress on the sustainability front or file CSR reports. Perhaps five years from now, most buildings are going to need to be able to react and have the flexibility to control their energy usage. Building owners will get paid by utilities for that. It’s a potential revenue source. AI is also a helpful tool for retailers who would rather spend less time micromanaging their energy usage and more time focusing on furnishing homes and serving customers.”

Cancellations / Revenue Churn

Cancellations of written sales, also known as revenue churn, kills cash flow and lowers financial performance. For this reason, it makes sense to track cancellations, understand why they happen, and implement processes that will lessen revenue churn.